State Information Technology Agency. 2008/9 Annual Report Presentation to Portfolio Committee of Police

Transcription

1 State Information Technology Agency 2008/9 Annual Report Presentation to Portfolio Committee of Police

2 Agenda Strategic Objectives : Achievements Key Integrated Service Provision Programs Human Capital Financial Performance Overview of SITA/SAPS information for 2008/09 financial year 2 OPERATIONAL EFFICIENCY IMPROVED SERVICES CUSTOMER & STAKEHOLDER SATISFACTION FINANCIAL SUSTAINABILITY

3 Achievements: Strategic Objectives

4 Results for South Africa Ensuring that ICT works for the Citizens Improve Long-Term Financial Sustainability Financial Responsibility Financial Optimise Revenue Streams Leverage Assets optimally (people & resources) Be a Trusted Advisor Optimise Working Capital Improve Cost Structure Customer Modernise Public Service Operations Reduce Government Cost of Doing Business Optimise ICT Infrastructure Services Improve Responsiveness By Leveraging Industry Partnerships we will Consistently Meet Service Levels Internal Process Extend Service Footprint Encourage Innovation Culture Maximise Efficiency of Processes Standardise & Automate Process Improve Service Level Management Improve the Management of Service Portfolio Understand Customers Business & Needs Learning & Growth E- Innovation SITA Process Excellence Service Excellence Embed SITA Culture & Values Develop Skills Improve Accountability Attract & Retain Talent. Build Leadership & Management Competencies

5 Achievements: Strategic Objectives Objectives/Target Set as per 2008/9 SITA Corporate Score Card: Achieved = 19 Not Achieved = 8 Categories for Objectives: Financial = 4 Objectives with 5 set targets Customer = 10 Objectives with 10 set targets Internal Processes = 4 Objectives with 5 set targets Learning and Growth = 5 Objectives with 7 set targets 5

6 Achievements: Strategic Objectives Objectives achieved: - Grow revenue base - Develop and implement an integrated, consistent and robust planning cycle regime - Develop detailed service catalogue and service metrics - Quality of service sample - Develop and implement the service offerings to local government using Shared Services model - Improve quality of revenue and reduce costs to customers for agency transactions - IFMS ( Integrated Financial Management System) - Develop and implement ICT Planning Governance Framework - E-Gov

7 Achievements: Strategic Objectives Objectives achieved (continued): - GWEA ( Government Wide Enterprise Architecture) - Quality improvement including implementation of an IT Service Management Framework - Improve business processes - Develop skills ( Identified Core and Critical Skills) - Focus on embedding SITA organizational values to ensure they are instilled in the way we work - Attract and retain critical skills and best performers - Develop and implement an Integrated Talent Management Strategy - Attainment of employment equity: EE and Disability

8 Achievements: Strategic Objectives Objectives not achieved - Achieve working capital and cash flow targets - Develop, implement and maintain competitive costing and sustainable pricing strategies (commercial models) - Convert all licensed software with a significant share of total government ownership to a single enterprise license - Signing of Service Level Agreements - Clean Audit Report - Implement procurement-specific interventions to improve operational excellence - Attainment of employment equity targets: Gender

9 Key Integrated Service Provision Programs Government Programmatic Support Local Government Support Program (Municipal ICT blueprint) The Local Government Support programme is an initiative designed for the purpose of identifying solutions, testing the concepts applicable to identified local government requirements with the intention of implementing these solutions in municipalities. Electronic Health record The objective of the Electronic Health Record project (e-hr.za) is to design and develop a solution for an Electronic Health record for South Africa that will allow the Department of Health (DoH) to have a single view of patient information across the country. SAPS and DoD These are outsourced ICT accounts that SITA manages on behalf of these clients. Education: Lurits The National Education Department has identified the need to design and implement a national learner unit record information and tracking system (LURITS). The LURITS is a web-based system that will enable the DoE to store the unit record level data of learners and educators in a central national database and will enable the Department to track the movement of learners from school to school throughout their school career. Poverty Index This initiative is intended to help in the validation of information of people applying for indigent grants. IEC Call Centre (and now Presidential Hotline) These initiatives showcase how optimization of existing ICT infrastructure can reduce the life cycle costs of solutions to government. Youth Development Programme (Youth Internship Programme) This programme offers unemployed diplomates and graduants an opportunity to enter into the ICT world through a year long internship programme. 9

10 Key Integrated Service Provision Programs Modernizing Government Systems Government-wide Enterprise Architecture (GWEA) The value of this framework would empower government ICT entities to: align their ICT plans and capabilities with departmental business plans and capabilities; to make informed decisions pertaining ICT investment, acquisition and development; to identify and reduce duplication of ICT; to improve security and interoperability among government information systems. Next Generation Network (NGN) The asset provides new capability to offer fully converged communications network that offers functionality such as data, voice and video transmission in a defines quality of service framework. Network Operations Centre (NOC) This asset enables SITA to proactively monitor the NGN to minimize network outages that may negatively affect service delivery. Integrated Financial Management System (IFMS) The purpose of the IFMS project is to consolidate, integrate and upgrade Government s out-dated legacy transversal I.T. systems in order to meet new legislative and organisational requirements, introduce cost-effective technologies, eliminate duplication, support e-government initiatives and contribute to broader socio-economic objectives such as contributing to skills development and stimulating the domestic ICT industry, particularly BEE and SMME companies. Next Generation e-government Establish an e-government platform that is central, scalable, flexible, extensible, reliable, customizable, and integrated on which online services can be delivered to citizens/business/foreigners, etc. Implementation of Free Open Source Software (FOSS) This initiative is intended to deliver numerous outcomes among which are to (1) develop skills for FOSS (research showed this was the key problem) (2) Promote open standards and open source (3) Facilitate migrations to FOSS by government departments (Migrations can be application, desktop, back-end, enterprise systems)

11 Human Capital

12 Equity Performance Employment Equity: Actual Target Race 62.83% - 60% Gender 45.87% - 46% Disability 1.34% - 1% 12

13 Key Human Capital Programs Development of Core Technical Skills Development: Leadership and Management Skills Culture Improvement Youth Internship Programme 13

14 Financial Performance

15 Governance Structure Audit and Risk Committee Strong Internal Audit Anti-Fraud hotline All issues reported are investigated and appropriate action taken

16 Audit Report Previous year - Unqualified - Emphasis of matter Current year - Unqualified - No emphasis of matter

17 Audit Report (continued) Items included in other matters: - Non-compliance with PFMA: Contract Management System not in place Approval to retain surpluses not requested from National Treasury - Non-compliance with SITA Act Service Level Agreements not signed Vacant prescribed Directors positions -- Managing Director and Legal Representative - Key Governance Responsibilities Audit delays Material audit adjustments to the annual financial statements (Projects) Internal control weaknesses Non-compliance with legislation Information systems not supportive Unresolved prior year audit findings Various investigations as reported on in the audit report

18 Financial Performance Revenue increased with 10% in line with the budget. Tariffs within the mainframe environment were lowered resulting in R225m less revenue than budgeted. Suppliers were paid more promptly, but challenges were experienced in timeous debt collection. This impacted negatively on working capital and the organisation generated less cash from operations than budgeted. This impacted on our capital expenditure program. Notwithstanding the above challenges and strategies put in place to address these problems, our solvency ration at the end of the year was 2.41:1 and our liquidity ratio was 1.98:1, leaving the company healthy and the financial structure sound.

19 Financial Performance, Highlights: - Revenue growth of 10% to R3,976 bn - Significant reduction in supplier payment periods - Solvency ratio 2.41:1 - Liquidity ratio 1.98:1 Areas for improvement: - Debtor days: days vs target of 65 days - Cash generated by operations: R87m vs budgeted R163m 19

20 Abridged Statement of Financial Performance for the year ended 31 March Rm Rm Revenue 3, ,607.6 Cost of sales 3, ,690.3 Gross surplus Operating expenses Results from operating activites Surplus before tax Surplus after tax Gross surplus % 19.37% 25.43% Opex % 17.82% 16.84% Surplus after tax % 3.87% 8.29% 20

21 Abridged Statement of Financial Position as at 31 March Rm Rm Assets Non current assets Current assets 1, ,926.7 Total assets 2, ,560.6 Net assets and liabilities Net assets 1, ,366.0 Liabilities Non current liabilities Current liabilities ,085.8 Total net assets and liabilities 2, ,560.6 Solvency ratio Liquidity ratio Benchmark: Solvency ratio 2:1, Liquidity ratio 1.5:1

22 Abridged Cash Flow Statement for the year ended 31 March Rm Rm Cash flows from operating activities Cash flows from investing activities (198.4) (261.4) Cash flows from financing activites (5.2) (5.2) (Decrease)/Increase in cash and cash equivalents (116.5) 4.5 Cash and cash eqivalents beg of year 1, Cash and cash equivalents end of year ,

23 Trade and other receivables Rm Rm Trade receivables Provision for doubtful debts (69.9) (57.4) Other receivables Ageing of trade receivables Rm % Rm % Current % % Past due 0 30 da ys % % Past due days % % Past due days (17.8) 2% % Past due more than 1 year % % % % 23

24 Revenue growth 24

25 Revenue growth (continued) Achieved budget revenue growth of 10% Growth areas: - Labour ( 8%) - Network and internet (20%) - Software licenses and maintenance (27%) - Project revenue (159%) - Sundry (111%) Reduction: - Computer equipment and maintenance (22%) - Mainframe income (10%)

26 Cost of sales 2009 in R m 26

27 Cost of sales (continued) Increased from previous year: - Depreciation (66%) due to capital expenditure in previous and current year - Direct Labour (18%) due to higher demand - Service delivery overheads (48%) due to agency transactions and computer equipment and maintenance costs

28 Capital expenditure R m 28

29 Capital expenditure (continued) Areas of spending on Capital Expenditure: - Buildings: R20m - Computer equipment: R110m - Office furniture: R33m - Intangible assets (software): R36m

30 Gross surplus R m 30

31 Gross surplus (continued) Reasons for decrease - Increase in agency transactions which translates into lower gross margin - Reduced tariffs in mainframe environment (R225m) to support lower expenditure for government

32 Operating expenses R m 32

33 Operating expenses Reasons for increase: - Operating leases (R13m) - Foreign exchange loss (R11m) - Impairment on trade receivables (R16m) - Audit fees (R4m)

34 Net surplus R m 34

35 Net surplus Reasons for decrease - Lower gross surplus - Increase in Operating expenditure

36 Overview of SITA/SAPS information for 2008/09 financial year SITA 2008/2009 Strategic Plan Alignment Financial Results for 2008/2009 Overview of Police ICT cost drivers Role of Agency Police Strategic Projects

37 SITA Strategic Plan Alignment SITA Strategic Plan Financial Sustainability Infrastructure Optimisation Extend Service Footprint Reduce Cost Modernise Public Service Operations Achieve Operation Excellence Develop our people Police Business Unit Plan Financial Sustainability Reduced Turnaround Times Proposal Responsiveness Value for Money Modernize SAPS Service Operations ITIL Alignment of Services Support Processes for SAPS Skills development for Core Competency gaps

38 Financial Results for 2008/2009 Recurring ICT Support Services ANNUAL ICT SERVICES 2006/2007 Growth 2007/2008 Growth 2008/2009 HOSTING SERVICES R 155,609, % R 202,773, % R 232,406,081 BUREAU SERVICES R 4,169, % R 5,020, % R 5,694,464 NETWORK SUPPORT SERVICES R 107,228, % R 123,762, % R 151,562,936 DISTRIBUTED SUPPORT SERVICES R 257,713, % R 279,394, % R 363,771,896 APPLICATION MAINTENANCE SERVICES R 150,961, % R 180,472, % R 201,763,993 R 675,681, % R 791,423, % R 955,199,370 Infrastructure Upgrade Programme (SAPS and IJS CAPEX funding) INFRASTRUCTURE PROJECTS 2007/ /2009 NETWORK UPGRADE R 155,227,286 R 182,237,161 MAINFRAME UPGRADE R 36,464,776 AD HOC EXPANSIONS (PBX, NETWORK) R 169,891,914 R 78,856,127 R 325,119,200 R 297,558,064

39 SAPS Costing Model 2008/ % 90% 80% 70% R 46,499,054 R 136,378,189 R 39,873,431 SAPS Overheads Contribution R222,750,674 for 2008/ % 50% 40% 30% 20% R 733,768,616 Error Margin Corporate Overheads Divisional Overheads Cost of Services 10% 0% SAPS Costing (VAT Incl)

40 Overview of Police ICT cost drivers Hosting Services Mainframe Upgrades reduced maintenance fees Network Services Maintenance introduced on 28 new switching centres (R38m) Active Directory and new regional support (R20m) Application Services Key contractors converted to permanent employees Decentralised Support Services 10% to 20% year-on-year growth from 05/06 Equipment increased from 117,377 to 119,377

41 Police ICT equipment growth Workstations Printers LAN Equipment '03/04 '04/05 '05/06 '06/07 '07/08 '08/09

42 Police ICT equipment growth Scanners FAX Digital Media '03/04 '04/05 '05/06 '06/07 '07/08 '08/09

43 Role of Agency Management and support of core ICT capability Utilize SA ICT industry on competitive basis as partners to render support services to Police REVENUE CHANNELED TO INDUSTRY PARTNERS ANNUAL ICT SERVICES 2008/ /2010 HOSTING SERVICES 66.04% 63.00% BUREAU SERVICES 80.00% 80.00% NETWORK SUPPORT SERVICES 65.82% 66.00% DISTRIBUTED SUPPORT SERVICES 47.63% 45.00% APPLICATION MAINTENANCE SERVICES 50.73% 46.00% TOTAL 55.81% 53.50% Act as procurement agency for Police managed ICT projects

44 Industry Partners AfriGIS Al Indigo Arivia.Com BCIT BCX Carlysle Human Capital (PTY) Ltd. Cornastone Dimension Data Exponant Faranani (PTY) Ltd. Forensic Data Analysis GijimaAST Investigative Software Services Kanimambo Computing (PTY) Ltd. Koba IT Solutions (569) Lechabile (PTY) Ltd. Neotel Real Global Business Solutions Relational Consulting Database Simeka Resource Solutions (PTY) Ltd. Tshilhulwane (Ethleumu) C entre Sizwe

45 Police Strategic Projects 2008/09 SITA supported/established the following strategic projects in 2008/2009 Deployment of E-Docket solution to 107 Police stations Development and implementation of Forensic Laboratory E-Dockets for exhibit management Implementation of the AVL vehicle tracking in 24,650 Police vehicles Implementation of GIS satellite imagery obtained from CSIR

46 Integrated Case Docket Management System (ICDMS)

47 Integrated Case Docket Management System (ICDMS) SITA

48 Thank you